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"It is customary for witnesses to express their great pleasure to appear before you. But because I am under oath, I am unable to say I share that sentiment."

--Harold Ickes, former Clinton aide, to the Thompson CommitteeEDITED BY LARRY LIGHTReturn to top

MAD COWS PUT THE HURT ON BLOOD BANKS

FEAR OF AN OFTEN-FATAL brain disease has prompted the quiet withdrawal of suspect plasma, worth tens of millions of dollars, from the U.S. blood supply since 1993. The Food & Drug Administration was concerned because donors contracted and sometimes died from the human version of mad cow disease, known as Creutzfeldt-Jakob Disease (CJD). "The impact has been enormous," says James MacPherson, president of America's Blood Centers in Washington.

Hit hard is the American Red Cross, which also has the responsibility for protecting the U.S. blood supply. Merle Freitag, vice-president of finance for the Red Cross's biomedical services, estimates the nonprofit has withdrawn products worth $100 million of plasma donated by people who were at risk of contracting CJD during a span of almost four years. A handful of pharmaceutical companies have recalled product as well, and industry insiders put the price of withdrawals at $30 million this year alone.

FDA officials stress that there have been no documented cases of CJD or other brain diseases caused by a blood transfusion. Researchers are looking into whether blood can be a carrier. But the feds are playing it safe.EDITED BY LARRY LIGHT Mary Beth Regan and Joan O'C. HamiltonReturn to top

INTEL INSIDE...DEC'S CHIP PLANT

A DEAL BREWING BETWEEN Intel and Digital Equipment Corp. may be more beneficial to Digital than initially thought. People close to the deal--which would settle a nasty patent infringement suit that Digital filed against Intel--say Digital will not sell its Alpha chip technology.

Rather, Intel is negotiating to buy Digital's "fab" chip plant in Hudson, Mass., for $650 million and to make Alpha chips there under contract to Digital for as long as a decade. Intel would also pay Digital up to $200 million for the right to use certain of its patents. And Digital would get big discounts on future purchases of Intel processors.

Analysts endorse Digital's move as a chance for the company to exit the chip-making business, where it lost an estimated $100 million last year, and still market its powerful Alpha. "It gets the fab monkey off our back," says one Digital exec. Neither company will comment officially. DEC CEO Robert Palmer has been pushing hard to settle the case.

One surprise: Intel is also negotiating to obtain manufacturing--and perhaps intellectual property--rights to the high-performance, low-power StrongARM, a DEC chip used in Apple's Newton and early Network Computers.EDITED BY LARRY LIGHT Andy Reinhardt and Paul C. JudgeReturn to top

FRESH CANNED VEGGIES?

THE U.S. FOOD & DRUG Administration is planning to crack down on the word "fresh" again, this time against Del Monte Foods' "Fresh Cut" canned vegetables. Back in 1991, then-FDA Commissioner David Kessler shocked industry by seizing shipments of Procter & Gamble's "Fresh Choice" orange juice, actually made from concentrate.

After Republicans won the Hill in 1994, they accused the FDA of being an onerous regulator, and companies began to test the agency's limits. In 1995, Del Monte introduced canned diced tomatoes labeled "Fresh Cut" and has since expanded the name to a variety of vegetables. The term doesn't mislead consumers, insists a Del Monte spokesman, because there's no question it's not fresh: "`Fresh cut' is an indication that it goes directly into the can, rather than being frozen or reconstituted."

The FDA argues that the label implies that the vegetables are somehow fresher than other canned vegetables. Del Monte competitors and consumer advocates have complained to the agency. "We're going after them," says a top FDA official about Del Monte. "How can we take that huge action on orange juice six years ago and turn our back on this?"EDITED BY LARRY LIGHT John CareyReturn to top


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